Kweichow Moutai, China’s most famous baijiu maker,  reported its first annual decline in profits and revenue since listing on the Shanghai stock market in 2001. The results underscore weakening alcohol demand amid economic headwinds, changing consumer behaviour, and continued government austerity measures.

Net profit for 2025 fell 4.5% to 82.32 billion yuan (US$12.07 billion), while revenue slipped 1.2% to 168.84 billion yuan – both below market expectations and the company’s own forecast.

Moutai’s core baijiu brand still generated the bulk of revenue (146.50 billion yuan), but its sub‑brands saw a sharper decline of 9.8% to 22.27 billion yuan.

The slowdown reflects broader trends: Chinese consumers are becoming more cautious as the economy cools and a persistent mortgage debt crisis weighs on disposable income. Baijiu still accounts for about 94% of spirits consumption in China and has long been prized as a luxury gift, but its appeal appears to be fading among younger generations.

Government austerity rules have also taken a toll. Beijing’s strict limits on civil servant spending, including bans on alcohol and tobacco at official functions, have hit premium baijiu demand hard.

Other major distillers face similar pressures. Wuliangye’s revenue for the first nine months of 2025 dropped 10% year‑on‑year, and Luzhou Laojiao’s sales fell 4.8% over the same period.

Once China’s largest listed company by market value, Kweichow Moutai has slipped to fifth place, behind two state banks, battery giant CATL, and oil refiner Sinopec.

In response to declining demand, Moutai has been restructuring its product portfolio, broadening sales channels, and introducing dynamic pricing for its direct‑to‑consumer retail route. The company reported better‑than‑expected demand ahead of the Lunar New Year, and its e‑commerce platform gained 6.28 million new users after accelerating the rollout of its flagship Feitian Moutai product on the app.

While the baijiu giant is fighting back, the overall picture suggests China’s alcohol market is entering a more challenging phase – one defined by cautious consumers, generational shifts, and tighter official spending.